Malaysians have, for some time now, been told that targeted subsidies is the way forward and that this more efficient method of subsidy (over the current blanket form) will happen sooner rather than later, as the government prepares the mechanism. When exactly?
Finance minister Datuk Seri Tengku Zafrul Abdul Aziz stressed that now is not the right time to implement targeted subsidies as the country’s economy is still in the recovery phase while inflation remains low compared with other countries.
“What we do not want is to have targeted subsidies, but the execution is not right. The implementation approach for the targeted petrol subsidy is also under review,” he said on the sidelines of the Wild Digital SEA 2022 event in KL yesterday, reported by Bernama.
So, it won’t happen “now” but “soon”? Not necessarily. “However, (in the future), it (subsidy implementation) would also depend on the economic condition and crude oil prices. If the (market) price of oil at that time is low, maybe there’s no need for targeted subsidy as the government can continue to give the subsidy,” the senator and former banker said.
Tengku Zafrul also said that the additional dividend of RM25 billion recently announced by Petronas will be used for government expenditure and subsidy costs. The latter is expected to go up to RM80 billion this year.
This comes as analysts predict that Malaysian motorists will be paying market price for RON 95 petrol and diesel soon, as there’s a high possibility that targeted subsidies will be implemented next year.
“We expect higher prices for RON 95 petrol and diesel next year with the revision of fuel subsidy. We understand that the test for the targeted subsidy mechanism started last month and will go on for three to six months. Therefore, we predict that fuel subsidy will be revised again next year as part of the Budget 2023 agenda, which is scheduled for October 7,” Maybank Investment Bank said in a research note last month.
In July, Tengku Zafrul said the T20 group, which is the top 20% of earners in the country, is enjoying some RM8 billion in fuel subsidies compared to the RM6 billion enjoyed by the bottom 40% (B40).
He was repeating what he said in May, that Malaysia’s rich are enjoying the lion’s share of government subsidies. “For every RM1 of fuel subsidy, 53 cents go to the T20, while 15 cents benefit the B40. So, for example if the subsidy bill this year is expected to top RM30 billion, over RM15 billion is subsidy to the T20,” the minister said then.
If you’re wondering why, the affluent have more cars, their cars consume more fuel and have larger fuel tanks. It’s as simple as that. While the need for targeted subsidy is clear, it’s much harder to find good way to implement a system that will that benefit the intended recipients with minimal leakage, and is universal.
In July, Tengku Zafrul, in a written parliamentary reply, said that a mechanism for targeted subsidy is being tested. “The (initial) testing will be followed by more extensive testing,” he said, adding that the government wants to ensure the feasibility of the mechanism in both urban and rural areas.
“It (testing) is expected to take between three and six months before the new system is implemented nationwide,” he said, adding that the implementation of the targeted fuel subsidy mechanism will be implemented in stages to ensure it does not cause inflation or affect economic growth.
So, we won’t have to pay market price for petrol “now” (RON 97 is currently going for RM4.30 per litre) but when is anyone’s guess. As is always the case in Malaysia, there are political factors in play too, and a general election has to be called by September 2023.
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Just say after next GE la
Realistically we cannot avoid a price hike, not when the world is selling petrol at RM 4.30 per liter when we are giving out at RM 2.05/l. The world is facing 11% inflation while we here complain when it is at 4%.
We must face reality.
Long term it is unsustainable and Opposition troopers & politicians should not stir anger with rakyat when eventually the hit comes because it is unavoidable. At least Gomen now will delay the hike at least until after GE15 so we can be a lot thankful for the reprieve in this moment.
Rather than be wasteful and complain here, lets think of ways to boost our income, lower our expenditures, control our desires to own the latest cars or latest phones or latest gadgets, or save money whereever we can – a little here and there goes a long way- plus invest that money, good investments not those get rich quick scams, living a moderate lifestyle without excesses and no need to be envious of the Jones with nice cars and overseas holidays.
In the end we should not and cannot blame the Gomen for hiking prices as this is real world facing us. Trying to molly coddle with artificial low prices will hurt in long run.
We need to face the harsh reality of this world we live in today.
agree bruh. Anything but BN
We will not bite this “bait”. BN is the only stable one for us.
TQ for the long essay
Obviously GE is more important
As long as Petronas can make money
There will be no point of cancelling subsidy
That only pushing the poor voters to even poorer
Amen that brother
Talked so much but seem you doesn’t get the point. reasonable price hike mostly are acceptable. but simply targeted subsidy is totally not the right way to go.
Talk so easy, what is ‘reasonable price hike’? Is 30% up as with Indonesia, reasonable?
Last few press conferences,hinting ,spewing dragon flames that those driving BMW will not get subsidised fuel.
Now,apa cerita ? GE 15 around the corner.
Just chameleonic.,some dudes.
BN take, gives back 60%
PH take, gives back 10%
Rakyat Malaysia should choose wisely mana mau pilih.
#BetterBetterNation
Copy paste: “haiyaa lu olang nanti kalau targeted lu olang bising cakap zalim, now cakap GE pulak. apa lagi lu mau?”
Always kampung mentality. Kais pagi makan pagi, kais petang makan petang. Never prepare for future.
Awesome
Yes, AWESOME!
Bravo, Tengku Zafrul.
07/09/2022 – West Texas Intermediate Crude – US$85.25 ppb.
As I’ve asserted, high oil prices will eventually fall. Clearly, sooner rather than later – from a high of almost US$130.00 recently!!
It can still fall further.
Please don’t play-play with our livelihoods – retracting oil subsidies…… and setting the stage for endless rounds oil-pushed daily necessities price rise again and again. :((
https://paultan.org/2022/08/29/indonesia-may-raise-its-fuel-prices-by-30-trim-subsidy/
Jokowi dun give a f8ck about peoples sentiments as he no longer has the presidency job but certainly got elevated to Pertamina BOD.
Inflation low? Which hole did you come out from? Everything’s gone up and some not by a small margin.
Try paying global inflation of 11%, then you will know what true inflation really feels like. Here inflation only puny 4%. Work harder then you won’t feel it at all.
Alamak!!!!
I thought the government going to remove the subsidy this month!
I thought if petrol increase RM1, I will then be able to increase my Teh Tarik RM1 just like previous times.
I’ve already paid booking for my new Mercedes.
Why not implement it?
It’s good for business.
Now, tell me not going to remove the subsidy means businesses don’t get to make more money.
Come on lah….
If MOF plan to remove the petrol subsidy for T20, reduce T20 income tax too. “It’s as simple as that”
“If you’re wondering why, the affluent have more cars, their cars consume more fuel and have larger fuel tanks. It’s as simple as that.”
As a MOF Minister Simply give comment like this to justify T20, the who MOF department its a joke.
Yes agreed, even if have multiple cars can they drive all the cars at once? and isn’t new BMW, Benz, VW with Turbo/Hybrid all pushing fuel consumption figures to be relative similar or better than Japanese counterparts due to strict emission standards? This justification don’t make any sense unless they compare Supercars vs Viva or Myvi vs motorcycle.
Can you think first before farting? Really tired of brainless ministers! Always say something stupid!
GE coming lah. Who in the right mind will cut candies.
GE15 is coming so he is trying to plead everyone to vote for BN. Let’s see what will happen after GE15.
I’m really perplexed. Why do our government always loved to do thing backward? If T20 is really the problem, then they should increase the taxation for T20. There is no need to introduce cumbersome targeted subsidy where there will be plenty of loopholes, monitoring and system implementation.
Sorry but I just only found out that I’m a T20 after checking all the articles and done my self calculations.
I should start doing what other T20s are doing.
Plan migration or at least plan sending our children overseas and telling them not to come back to Malaysia.
Let THEM have it all for themselves.
Yes, they can say whatever they want. If they win GE15, you bet the targeted fuel subsidy will be enforced. You can count on it.
For every RM1 in subsidy, RM0.53 goes to the T20
But for every RM1 in personal tax, RM0.95 is from the T20??
Personal tax collected is minor compared to how much corporate taxes paid, plus T20 owners often ride on corporate deductions for personal gains. Stop your T20 whining.
Bullshit, when you reach T20 then talk again. taxed 30k per years for nothing, then you realizes how lucky you are in B40.
PlainBS, you folks should be paying Rm40k tax per year but thru creative financing and under reporting you folks are not paying the full ammount you should be paying. If you want to share the luck of B40 that is easy, donate 99% of your monthly income away and you can share the fortune. Otherwise stop your BS.
of all the u-turns, this one we welcome it with a big hug ya. it’ll be crazy this time for them to not u turn and drive the inflation through the roof!
Just say la that targeted subsidy is easier said than done. Just focus on strengthening the economy, the ringgit and the rakyats spending power then can immediately forget about subsidies…
Damn.. my area already increase teh tarik price by RM0.30.
Bro, sure lah have to raise a little.
We already booked our Mercedes when the Goverment said the subsidies will be reduced.
We have to pay for the Mercedes any how.
So raise RM0.30 is acceptable lah.
Just like how chicken sellers increased their prices as soon as possible even when there’s no shortage of chickens at all.
Now you see them whining to let them export their chickens cause they too have a lot of new Beemers, Fortuners and Harriers to pay off.
Now it is not the right time. We surely can lose the election. After election is the very right time,we had another 5 years not juat removing the subsidies but can also impose fuel tax ,but after that when it will become not right time again.
instead why not increase slowly from 2.05 to 2.10 within 6months or whichever. and target subsidy to those who really need them not some group claim not using much but in reality at home they have new car.
haiyaa lu olang nanti kalau targeted lu olang bising cakap zalim, now cakap GE pulak. apa lagi lu mau?
Please tell us how much are the taxes from the T20 are feeding the country too!!!! M40 and B40 are also paying lower taxes and some none. Is the govt encouraging more people to become M40 or B40???
NO! Govt encouraging T20 to leave the country. they switching the gear backward and go back to 70/80’s plantation era like our grandparents doing lombong and getah.